TIDMNARS
RNS Number : 7927O
Nationwide Accident Repair Srvs PLC
25 September 2013
NARS
NATIONWIDE ACCIDENT REPAIR SERVICES PLC
("Nationwide", "the Company" or "the Group")
Unaudited Half Year Results
for the six months ended 30 June 2013
Nationwide provides integrated automotive accident repair
management services to the UK insurance industry, fleet and retail
customers. It is the largest dedicated provider of accident repair
services in the UK.
Key Points
-- Results in line with revised expectations
-- Revenue decreased by 2.0% to GBP79.1m (2012: GBP80.7m)
- insurance revenue decreased by 4.6% to GBP58.3m (2012:
GBP61.1m) however market share increased
- good growth in fleet revenue, up by 7.1% to GBP18.2m (2012: GBP17.0m)
- retail revenue increased to GBP2.7m (2012: GBP2.6m)
-- Underlying(1) operating profit of GBP1.9m (2012: GBP3.6m)
-- Underlying(1) profit before tax of GBP1.4m (2012: GBP3.0m)
Statutory profit before tax of GBP1.4m (2012: GBP2.4m)
-- Underlying(1) earnings per share of 2.3p (2012: 5.6p)
Statutory earnings per share of 2.3p (2012: 4.5p)
-- Interim dividend of 1.0p (2012: 1.9p) per share - see comment on dividend
-- Post period, completed the strategic acquisition of vehicle
accident repair specialist group, Exway, in the South West
-- Cash at 30 June 2013 remains strong at GBP5.0m (30 June 2012:
GBP8.0m; 31 December 2012: GBP5.1m)
-- Board expects an improved performance in the second half and beyond
Notes: 1 . 'Underlying' is calculated before non-recurring items
of GBPnil in 2013 (2012: GBP0.6m operating cost before tax).
Michael Marx, Chairman, commented,
"Half year results are in line with the revised Board
expectations after the trading update announced on 5 August and
reflect the ongoing difficult trading environment, which is
affecting the automotive repair industry as a whole. Nationwide's
performance is strong relative to many operators in the industry
nonetheless profitability was affected by both margin pressures and
an adverse workflow mix. We are confident that the measures already
adopted to enhance operational efficiency and sales performance
will help to deliver an improved performance in the second half of
2013 and beyond.
While the current environment is tough, there are strategic
growth opportunities available and our goal is to continue to
broaden the Group's range of complementary automotive related
services to develop our presence in the core insurance market and
newer fleet and retail markets."
Enquiries:
Nationwide Accident Michael Wilmshurst, Chief T: 020 3178 6378
Repair Services Executive (today)
plc David Pugh, Group Finance T: 01993 701720
Director
Biddicks Katie Tzouliadis/ Alex T: 020 3178 6378
Shilov
Westhouse Securities Antonio Bossi T: 020 7601 6100
Henry Willcocks
CHAIRMAN'S & CHIEF EXECUTIVE'S STATEMENT
Introduction
Half year results are in line with the revised Board
expectations after the trading update announced on 5 August and
reflect the ongoing difficult trading environment, which is
affecting the automotive repair industry as a whole. Nationwide's
performance is strong relative to many operators in the industry,
nonetheless, as previously reported, the Group's underlying pre-tax
profit reduced to GBP1.4m (2012: GBP3.0m) over the first half as a
result of both margin pressures and an adverse workflow mix.
However, we expect to see an improved performance in the second
half. This will be partly driven by the strategic acquisition we
made in the South West region after the period end, which we
comment on further in this Statement and by measures which have
been adopted to enhance operational efficiency and sales
performance.
Our share of the insurance funded market, where capacity exceeds
demand, continues to increase alongside good growth in fleet sales
and a further rise in retail volumes. Further growth has also been
delivered by our mobile repair and glass activities.
While the current environment is tough, there are strategic
growth opportunities available and our goal is to continue to
broaden the Group's range of complementary automotive related
services to develop our presence in the core insurance market and
newer fleet and retail markets.
Financial Results
Group revenue for the six months to 30 June 2013 of GBP79.1m
(2012: GBP80.7m) is down by 2.0%. We are pleased with the
continuing growth in fleet revenue which increased by 7.1% to
GBP18.2m (2012: GBP17.0m) and retail sales at GBP2.7m (2012:
GBP2.6m) have increased in challenging economic conditions. The
decline in Group revenue arises wholly from a 4.6% reduction in
insurance revenue to GBP58.3m (2012: GBP61.1m), however we have
continued to increase our share of this market.
Margin pressures and an adverse workflow mix are reflected in
the gross margin of 34.2% (2012: 36.3%), with the performance of
Nationwide Crash Repair Centres ("NCRC") in the South West being
particularly impacted through a shortfall in repair volumes whilst
in some other parts of the UK surges in workflow resulted in higher
volume but lower margin work. Throughout the period we continued to
deliver high levels of customer satisfaction.
Underlying profit before tax of GBP1.4m (2012: GBP3.0m) is lower
than the corresponding period mainly due to margin pressures and an
adverse workflow mix. Underlying earnings per share for the period
was 2.3p (2012: 5.6p). Statutory profit before tax for the six
months to 30 June 2013 was GBP1.4m (2012: GBP2.4m, after
non-recurring costs of GBP0.6m) resulting in statutory earnings per
share of 2.3p (2012: 4.5p).
The Group's cash position of GBP5.0m (30 June 2012: GBP8.0m; 31
December 2012: GBP5.1m) remains strong. Further working capital
improvements have been attained through enhanced back office
processing and effective cash collection procedures.
Review of Operations by Business Segment
Good revenue growth was delivered by both Network Services and
Motorglass, however from a Group perspective the effects of these
were more than offset by the shortfall in NCRC's insurance revenue
and the margin pressures which were experienced throughout our
Group.
Network Services is our "upstream" accident management service
for insurance companies and fleets. Operating a 24 hour call centre
facility, the business receives first notification of loss, deploys
vehicle damage work to NCRC and an approved network of repairers,
handles claims, organises courtesy and hire vehicles, provides
engineering services and facilitates salvage.
During the six months to 30 June 2013 Network Services increased
revenue by 14.1% to GBP22.7m (2012: GBP19.9m) of which GBP14.3m
(63%) was deployed for repair into the Group's NCRC sites. External
revenue of GBP8.4m (2012: GBP7.4m) grew by 13.5% due to increased
work volumes from existing insurance customers.
As a greater proportion of repair activity was deployed into
NCRC, who enjoy intra-group discounts, Network Services gross
margin was lower year-on-year at 8.8% (2012: 10.1%).
NCRC comprises our national network of 60 bodyshops, our mobile
repair fleet and three Fast Fit Plus vehicle service centres which
undertake maintenance, MOT, tyre replacement and other work. NCRC
is our largest revenue generating business segment and sales for
the half year totalled GBP67.6m (2012: GBP70.7m).
Revenue generated by NCRC from insurance customers of GBP51.5m
(2012: GBP56.3m) was down by 8.5%, albeit that this represents an
increased share of this market which continues to be adversely
impacted by declining motor claims frequency. We are pleased with
the 13.6% growth in NCRC's sales to fleet customers which, at
GBP13.4m (2012: GBP11.8m), represent 20% of NCRC's revenue. Retail
sales increased to GBP2.7m (2012: GBP2.6m).
Margin pressures and an adverse workflow mix are reflected in
the lower NCRC gross margin of 36.1% (2012: 37.8%), with the
performance in the South West being particularly impacted through a
shortfall in repair volumes following the non-renewal of a
significant contract with Aviva last year. The acquisition of Exway
in July 2013 (see below) should have a significantly beneficial
impact on NCRC's performance in this geographical region. In some
other parts of the UK, surges in workflow resulted in higher volume
but lower margin work. In order to improve the flow and mix of work
across our network, we have made further enhancements to the
Group's industry leading I.T. platform and have increased the
collaboration between Network Services and NCRC. We are already
experiencing the benefits of these actions which will help to
improve future performance.
Overall customer satisfaction levels, as measured by independent
telephone surveys which rate the overall NCRC quality of repair,
remain high at 85.6% (2012: 86.1%). The speed of repair has also
improved further with a "key-to-key" repair time (time taken from
receipt of vehicle) of 10.66 days (2012: 10.97 days) and a "full
cycle" time (time taken from the notification of claim) of 15.83
days (2012: 15.68 days).
Motorglass operates a fleet of specialist vans for automotive
glass repair and replacement which is coordinated from a call
centre using the Group's common I.T. platform. For the six months
to 30 June 2013 revenue increased by 20.0% to GBP3.6m (2012:
GBP3.0m) with strong growth in insurance sales and good growth in
fleet sales. The increased demand was met partially through the use
of subcontractors and this resulted in a lower gross margin at
19.4% (2012: 20.0%). We are currently identifying areas for the
geographical expansion of our own technicians.
Acquisition
Managing economies of scale and flow of work across the Group's
sites are key. In line with this, and as previously announced, in
July 2013 we completed a strategic acquisition in the South West
region. The purchase of the business of Exway Coachworks Ltd
("Exway"), the vehicle accident repair specialist group which is
headquartered in Torbay and operates from seven sites, is expected
to generate annualised sales of around GBP6m and will enhance
operational efficiency in the region. The consideration, paid
wholly in cash, has been largely funded from the Group's enhanced
working capital position and is not anticipated to significantly
impact on the current management expectation for year end cash.
Exway also helps to increase the Group's presence in its target
markets of insurance, fleet and retail. The acquisition will result
in an exceptional cost in the current financial year and is
expected to represent an above average Group return on
investment.
Market Overview and Strategy
The cyclical and structural pressures in our market, on which we
have commented in past reports, remain evident, with motor claims
frequency still trending downwards and supply exceeding demand in
the insurance marketplace. However the downward claims trend
appears to be flattening and, while there is still overcapacity, we
are seeing an acceleration in the rate at which bodyshop operators
are facing distress. Market headwinds are clearly affecting the
Group's performance however, as the largest dedicated provider of
accident repair services in the UK, we believe that the
acceleration of market pressures also provides us with
opportunities.
The Group strategy is focused on extending the range of our
automotive support service solutions for insurance, fleet and
retail customers and we strongly believe that we can deliver
competitive advantage to our customers through a complementary
range of integrated services. The Group's IT platform plays a major
role here as it provides industry-leading data with significant
commercial and operational advantages.
We aim to continue to increase our presence in the insurance
market. As well as seeking to secure additional volumes from
insurers, we see attractive strategic acquisition opportunities in
localised areas, such as that which we have done in the South West
through the acquisition of Exway. In addition, we will continue to
target economies of scale and flow of work in order to deliver
competitive advantage for our customers.
We remain focused on building revenues from our newer markets of
fleet and retail. We have an encouraging pipeline of opportunities
with new and existing customers which can be further enhanced by
recent selective sales and operational appointments. The integrated
range of our services covering fixed and mobile repair, glass and
accident management allows Nationwide to offer a coordinated
'one-stop-shop' solution for customers and also provide the
operational delivery and visibility for fleet managers and retail
consumers. The fleet and retail accident repair market in the UK is
estimated at GBP1.4 billion, representing 40% of the total market.
Nationwide's share of this market is around 3% with fleet and
retail sales representing 26% of the Group's overall activity.
As we look to further extend the range of the Group's automotive
support related services, we are building on a firm platform. We
already have expertise in the management of our courtesy vehicle
fleet, the development of progressive technological solutions, the
management of networks and we are one of the UK's largest consumers
of after market automotive parts. By leveraging our expertise in
these areas we plan to expand the range of services available to
support our customers with a vision to develop Nationwide as the
UK's leading integrated, automotive support service group.
Dividend
As previously indicated, in the light of both the trading
environment and the strategic growth opportunities that have been
identified, the Board considers it prudent to reassess the level of
the Group's dividend payments. The Board is very aware of the
importance of the dividend to shareholders and is adopting an
appropriate dividend policy taking into consideration a payout
ratio which reflects this importance whilst allowing the Group to
exploit growth opportunities.
The Board is therefore declaring an interim dividend of 1.0p
(2012: 1.9p) per share, which will be paid on 5 November 2013 to
shareholders on the register at the close of business on 11 October
2013.
Outlook
The Board remains focused on creating shareholder value through
both income and growth.
We are confident that the measures already adopted to enhance
operational efficiency and sales performance will help to deliver
an improved performance in the second half of 2013 and beyond.
Unaudited Consolidated Statement of Comprehensive
Income Unaudited Unaudited Audited
For the six months ended 30 June 2013 Restated
(1)
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2013 2012 2012
Notes GBP'000 GBP'000 GBP'000
--------------------------------------------------- ------ ------------ ------------ ----------
Revenue 2 79,129 80,715 155,874
Cost of sales (52,047) (51,436) (100,567)
--------------------------------------------------- ------ ------------ ------------ ----------
Gross profit 27,082 29,279 55,307
Distribution costs (15,681) (15,794) (30,606)
--------------------------------------------------- ------ ------------ ------------ ----------
Administrative expenses (9,504) (9,868) (17,925)
Share option charge - - (13)
Non-recurring administrative costs 3 - (623) (376)
--------------------------------------------------- ------ ------------ ------------ ----------
Total administrative costs (9,504) (10,491) (18,314)
--------------------------------------------------- ------ ------------ ------------ ----------
Operating profit 1,897 2,994 6,387
Net finance costs 4 (545) (628) (1,255)
--------------------------------------------------- ------ ------------ ------------ ----------
Profit before tax 1,352 2,366 5,132
Income tax expense 5 (340) (418) (1,148)
--------------------------------------------------- ------ ------------ ------------ ----------
Profit for the year attributable to equity
holders of the parent 1,012 1,948 3,984
--------------------------------------------------- ------ ------------ ------------ ----------
Defined benefit plan actuarial (losses)/gains (94) (2,255) 2,185
Tax on other comprehensive income (278) 80 (1,024)
--------------------------------------------------- ------ ------------ ------------ ----------
Other comprehensive income (372) (2,175) 1,161
Total comprehensive income for the period 640 (227) 5,145
--------------------------------------------------- ------ ------------ ------------ ----------
Attributable to:
Equity holders of the parent 640 (227) 5,145
--------------------------------------------------- ------ ------------ ------------ ----------
Earnings per share
Basic 6 2.3p 4.5p 9.2p
Diluted 6 2.3p 4.5p 9.2p
--------------------------------------------------- ------ ------------ ------------ ----------
(1) See Note 1
All activities of the Group are classed as continuing.
The accompanying notes form an integral part of these financial
statements.
Unaudited Consolidated Statement of
Financial Position Unaudited
As at 30 June 2013 Unaudited Restated (1) Audited
30 Jun 30 Jun 31 Dec
2013 2012 2012
Notes GBP'000 GBP'000 GBP'000
----------------------------------------- ------ ------------ --------------- ----------
Assets
Non--current assets
Goodwill 6,266 6,266 6,266
Property, plant and equipment 8 9,064 10,576 9,970
Deferred tax asset 5,425 6,525 5,736
----------------------------------------- ------ ------------ --------------- ----------
20,755 23,367 21,972
----------------------------------------- ------ ------------ --------------- ----------
Current assets
Inventories 2,373 2,383 2,594
Trade and other receivables 21,422 27,869 21,147
Current tax receivable - 119 -
Cash and cash equivalents 5,006 7,962 5,071
----------------------------------------- ------ ------------ --------------- ----------
28,801 38,333 28,812
----------------------------------------- ------ ------------ --------------- ----------
Total assets 49,556 61,700 50,784
----------------------------------------- ------ ------------ --------------- ----------
Liabilities
Non--current liabilities
Long-term provisions 889 2,339 1,207
Pension fund deficit 22,135 27,760 22,698
----------------------------------------- ------ ------------ --------------- ----------
23,024 30,099 23,905
----------------------------------------- ------ ------------ --------------- ----------
Current liabilities
Short-term provisions 533 1,037 725
Trade and other payables 25,913 32,876 24,725
Current tax liabilities 304 - 732
----------------------------------------- ------ ------------ --------------- ----------
26,750 33,913 26,182
----------------------------------------- ------ ------------ --------------- ----------
Total liabilities 49,774 64,012 50,087
----------------------------------------- ------ ------------ --------------- ----------
Net (liabilities)/assets (218) (2,312) 697
----------------------------------------- ------ ------------ --------------- ----------
Equity
Equity attributable to the shareholders
of the parent
Share capital 10 5,400 5,400 5,400
Capital redemption reserve 1,209 1,209 1,209
Share premium account 11,104 11,104 11,104
Revaluation reserve 8 8 8
Retained earnings (17,939) (20,033) (17,024)
----------------------------------------- ------ ------------ --------------- ----------
Total equity (218) (2,312) 697
----------------------------------------- ------ ------------ --------------- ----------
(1) See Note 1
The accompanying notes form an integral part of these financial
statements.
Company Number 966807
Unaudited Consolidated Statement of Changes in Equity
For the six months ended 30 June
2013
Capital Share
Share redemption premium Reval Retained
Capital reserve account reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Balance at 1 January 2011 5,400 1,209 11,104 8 12,975 30,696
Effect of change in accounting
policy (IAS 19) - - - - (17,264) (17,264)
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Balance at 1 January 2011 (Restated) 5,400 1,209 11,104 8 (4,289) 13,432
Share option charge - - - - 49 49
Dividend paid - - - - (2,333) (2,333)
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Transactions with owners - - - - (2,284) (2,284)
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Loss for the year - - - - (2,619) (2,619)
Other comprehensive income - - - - (10,614) (10,614)
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Total comprehensive income
for the year - - - - (13,233) (13,233)
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Balance at 31 December 2012 5,400 1,209 11,104 8 (19,806) (2,085)
Profit for the six month period - - - - 1,948 1,948
Other comprehensive income - - - - (2,175) (2,175)
Total comprehensive income
for the period - - - - (227) (227)
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Balance at 30 June 2012 5,400 1,209 11,104 8 (20,033) (2,312)
Share option charge - - - - 13 13
Dividend paid (note 7) - - - - (2,376) (2,376)
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Transactions with owners - - - - (2,363) (2,363)
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Profit for the six month period - - - - 2,036 2,036
Other comprehensive income - - - - 3,336 3,336
Total comprehensive income
for the period - - - - 5,372 5,372
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Balance at 31 December 2012 5,400 1,209 11,104 8 (17,024) 697
Dividend paid (note 7) - - - - (1,555) (1,555)
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Transactions with owners - - - - (1,555) (1,555)
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Profit for the six month period - - - - 1,012 1,012
Other comprehensive income - - - - (372) (372)
Total comprehensive income
for the period - - - - 640 640
-------------------------------------- -------- ----------- -------- -------- --------- ---------
Balance at 30 June 2013 5,400 1,209 11,104 8 (17,939) (218)
-------------------------------------- -------- ----------- -------- -------- --------- ---------
The accompanying notes form an integral part of these financial
statements.
Unaudited Consolidated Cash Flow Statement
For the six months ended 30 June 2013 Unaudited Unaudited Audited
Restated
(1)
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2013 2012 2012
GBP'000 GBP'000 GBP'000
----------------------------------------------- ------------ ------------ ----------
Operating activities
Profit for the period 1,012 1,948 3,984
Adjustments to arrive at operating cash flow
Other comprehensive income (372) (2,175) 1,161
Net finance costs 11 2 34
Depreciation 1,130 1,182 2,395
Loss/(profit) on sale of property, plant and
equipment (incl. non-recurring items) 25 (19) (38)
Deferred tax on pension deficit 277 (79) 1,024
Taxation recognised in profit or loss 340 418 1,148
Changes in inventories 221 76 (135)
Changes in trade and other receivables (275) 244 6,966
Changes in trade and other payables 1,189 (2,865) (11,015)
Changes in provisions - 379 85
Movement in pension fund liability 737 2,965 (797)
Share option scheme charge - - 13
Outflow from pension obligations (1,300) (1,300) (2,600)
Outflow from provisions (510) (977) (2,127)
----------------------------------------------- ------------ ------------ ----------
Net cash flow from operating activities 2,485 (201) 98
Tax (paid)/received (735) 556 362
----------------------------------------------- ------------ ------------ ----------
1,750 355 460
Investing activities
Additions to property, plant and equipment (606) (408) (1,024)
Proceeds from the disposal of property, plant
and equipment 357 22 50
(249) (386) (974)
----------------------------------------------- ------------ ------------ ----------
Financing activities
Dividend paid (1,555) - (2,376)
Interest paid (11) (2) (34)
(1,566) (2) (2,410)
----------------------------------------------- ------------ ------------ ----------
Net decrease in cash and cash equivalents (65) (33) (2,924)
Cash and cash equivalents at beginning of
period 5,071 7,995 7,995
----------------------------------------------- ------------ ------------ ----------
Cash and cash equivalents at end of period 5,006 7,962 5,071
----------------------------------------------- ------------ ------------ ----------
(1) See Note 1
The accompanying notes form an integral part of these financial
statements.
Notes to the Unaudited Interim Statement
For the six months ended 30 June 2013
1. Basis of preparation
The unaudited interim accounts have been prepared on the same
basis and using the same accounting policies as used in the audited
financial statements for the year ended 31 December 2012.
These unaudited interim statements for the period ended 30 June
2013 have been prepared in accordance with IAS 34, Interim
Financial Reporting. They do not include all of the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group
for the year ended 31 December 2012, which have been prepared in
accordance with IFRS.
The financial information set out in these interim accounts does
not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. The figures for the year ended 31 December 2012
have been extracted from the statutory financial statements which
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unmodified.
Change in accounting policy
During 2012, the Group early-adopted IAS 19 (Employee Benefits,
revised). The amendment no longer allows the "corridor" approach
and so all actuarial gains and losses will be recognised in the
period in which they arise. The amendment has had a material impact
on the Consolidated Statement of Financial Position. The revised
standard also requires interest income or expense to be calculated
on the net balance recognised, with the rate used to discount the
defined-benefit obligation.
The tables below show the impact of the change in accounting
policy:
6 months to June
2012
GBP'000
------------------------------------------- -----------------
Profit before change in accounting policy 1,684
Decrease in administration costs 888
Increase in finance costs (654)
Decrease in income tax charge 30
Profit after change in accounting policy 1,948
Profit per share (basic and diluted) 4.5p
------------------------------------------- -----------------
As reported before change in accounting
policy 3.9p
Adjustment due to change in accounting
policy 0.6p
------------------------------------------- -----------------
As at June 2012
GBP'000
----------------------------------------------- ----------------
Net pension asset
Net pension asset before change in accounting
policy 11,747
Adjustment due to change in accounting
policy (2,021)
Cumulative effect from prior years (37,486)
----------------------------------------------- ----------------
Net pension liability (27,760)
----------------------------------------------- ----------------
Deferred tax liability
Deferred tax liability before change
in accounting policy (2,956)
Adjustment due to change in accounting
policy 110
Cumulative effect from prior years 9,371
----------------------------------------------- ----------------
Deferred tax asset 6,525
----------------------------------------------- ----------------
Shareholders' equity
Shareholders' equity before change in
accounting policy 27,714
Adjustment due to change in accounting
policy (1,911)
Cumulative effect from prior years (28,115)
----------------------------------------------- ----------------
Shareholders' equity (2,312)
----------------------------------------------- ----------------
2. Segment analysis
The chief operating decision maker, as defined by IFRS 8, has
been identified as the Executive Directors of Nationwide Accident
Repair Services plc. The information reported below is consistent
with the reports regularly provided to the Board of Directors. The
Group operates three main operating segments, Nationwide Crash
Repair Centres ("NCRC" which incorporates Mobile Repairs), Network
Services and Motorglass (which incorporates Windscreen Invoice
Control Service "WICS"). The segments are identified by their
distinct functions within the Group, being site-based repairs,
supported by mobile vehicle repairs, accident administration and
glass services respectively. NCRC comprises a dedicated network of
repair centres across England, Scotland and Wales. Network Services
provides accident administration services to insurance companies
and fleet operators, including deploying work to Nationwide Crash
Repair Centres Limited, while Motorglass and WICS provide glass,
air conditioning and auto-electronic services to the automotive
industry. The income and costs of the holding company are shown
within NCRC, which acts as the support function for the Nationwide
Crash Repair Centres bodyshops.
Intra-group transactions with Network Services are accounted for
including VAT, as the segment is within a separate VAT group. All
intra-group transactions are invoiced or recharged at cost.
The revenues and net result generated by the three business
segments are summarised as follows:
NCRC Network Services Motorglass Total
6 months to 30 June GBP'000 GBP'000 GBP'000 GBP'000
2013
-------------------------- -------- ----------------- ----------- --------
Revenue from external
customers 67,566 8,362 3,201 79,129
-------------------------- -------- ----------------- ----------- --------
Inter-segment revenues - 14,290 354 14,644
-------------------------- -------- ----------------- ----------- --------
Total revenues 67,566 22,652 3,555 93,773
-------------------------- -------- ----------------- ----------- --------
Depreciation 1,001 64 65 1,130
--------------------------
Non-recurring items - - - -
Underlying profit before
tax 773 391 188 1,352
-------------------------- -------- ----------------- ----------- --------
Total assets 39,015 8,079 2,462 49,556
-------------------------- -------- ----------------- ----------- --------
Additions to non-current
assets 560 - 46 606
-------------------------- -------- ----------------- ----------- --------
6 months to 30 June GBP'000 GBP'000 GBP'000 GBP'000
2012
(See note 1)
Revenue from external
customers 70,693 7,467 2,555 80,715
Inter-segment revenues - 12,458 428 12,886
Total revenues 70,693 19,925 2,983 93,601
Depreciation 1,050 66 66 1,182
Non-recurring items (623) - - (623)
Underlying profit before
tax 2,630 178 181 2,989
Total assets 53,487 5,358 2,855 61,700
-------------------------- -------- ----------------- ----------- --------
Additions to non-current
assets 367 - 41 408
-------------------------- -------- ----------------- ----------- --------
12 months to 31 December GBP'000 GBP'000 GBP'000 GBP'000
2012
Revenue from external
customers 136,106 14,601 5,167 155,874
Inter-segment revenues - 24,482 829 25,311
Total revenues 136,106 39,083 5,996 181,185
Depreciation 2,135 130 130 2,395
Non-recurring items (376) - - (376)
Underlying profit before
tax 4,633 515 360 5,508
Total assets 41,694 6,307 2,783 50,784
-------------------------- -------- -------- -------- --------
Additions to non-current
assets 957 - 67 1,024
-------------------------- -------- -------- -------- --------
3. Non-recurring items
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2013 2012 2012
GBP'000 GBP'000 GBP'000
------------------------------ ------------ ----------- ----------
Site closure costs - (379) (933)
Release of closure provision - - 848
Employee settlements - (244) (291)
- (623) (376)
------------------------------------------- ----------- ----------
Eight sites were closed in December 2011 and one site in June
2011. In addition, one further site was closed in April 2012. The
site closure costs of GBP933k in 2012 include an additional
provision for future rental commitments, dilapidations and costs in
relation to the 2012 closure. The release of GBP848k of the closure
provision to non-recurring items followed a reassessment of the
provision for the sites closed in 2011.
The employee settlements in 2012 arose due to a change in the
senior management of the Group.
4. Net finance costs
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2013 2012 2012
Restated (1)
GBP'000 GBP'000 GBP'000
----------------------------------- ----------- ------------- ----------
Interest payable on bank balances (11) (2) (34)
Pension costs (note 9):
Interest expense (2,031) (1,980) (3,924)
Interest income 1,497 1,354 2,703
----------------------------------- ----------- ------------- ----------
(545) (628) (1,255)
----------------------------------- ----------- ------------- ----------
(1) See note 1
5. Tax expense
6 months 6 months 12 months
to 30 Jun to 30 Jun to 31 Dec
2013 2012 2012
GBP'000 GBP'000 GBP'000
----------------------------------------- ----------- ---------- ----------
Current tax:
United Kingdom corporation tax at
23.5% (2012: 24.5%) 307 17 1,032
Adjustments in respect of prior periods - - 31
----------------------------------------- ----------- ---------- ----------
307 17 1,063
Deferred tax:
Movement relating to pension asset
(IAS 19) (148) (59) 278
Temporary differences origination
and reversal 181 153 408
Losses carried forward - 307 (601)
340 418 1,148
----------------------------------------- ----------- ---------- ----------
6. Earnings per share
Basic earnings per share
Basic earnings per share has been calculated using the net
profit attributable to the shareholders of the Company of
GBP1,012,000 for the six month period (2012: GBP1,948,000) (12
months to 31 December 2012: GBP3,984,000). The weighted average
number of outstanding shares used for the basic earnings per share
amounted to 43,197,220 (2012: 43,197,220) (12 months to 31 December
2012: 43,197,220).
Diluted earnings per share
The diluted earnings per share has been calculated using the net
profit attributable to the shareholders of the Company of
GBP1,012,000 for the six month period (2012: GBP1,948,000) (12
months to 31 December 2012: GBP3,984,000). The weighted average
number of outstanding shares used for diluted earnings per share
amounted to 43,197,220 (2012: 43,197,220) (12 months to 31 December
2012: 43,197,220).
In the current year due to the average market price of GBP0.70,
the share options are not included in the diluted earnings per
share calculation. In the six month period to 30 June 2012 the
average market price was GBP0.64 (12 months to 31 December 2012:
GBP0.63) and similarly, due to the share options being
anti-dilutive, the diluted earnings per share is the same as the
basic earnings per share.
Underlying earnings per share
The underlying earnings per share has been calculated as
follows:
6 months 6 months 12 months
to 30 Jun to 30 Jun To 31 Dec
2013 2012 2012
Restated (1)
----------------------------------- ----------- ------------- ----------
GBP'000 GBP'000 GBP'000
----------------------------------- ----------- ------------- ----------
Profit before tax (as stated) 1,352 2,366 5,132
Non-recurring items (note 3) - 623 376
1,352 2,989 5,508
Tax expense (as stated) (340) (418) (1,148)
Tax effect on non-recurring items - (153) (92)
----------------------------------- ----------- ------------- ----------
1,012 2,418 4,268
----------------------------------- ----------- ------------- ----------
Underlying earnings per share 2.3p 5.6p 9.9p
----------------------------------- ----------- ------------- ----------
(1) See note 1
7. Dividends
In June 2013, the Company paid a dividend of GBP1,555,100 to its
equity shareholders. This comprised a final dividend in respect of
2012 of 3.6p per share. The directors have declared an interim
dividend of 1.0p per share (2012:1.9p), which will be paid on 05
November 2013 to shareholders on the register at the close of
business on 11 October 2013.
8. Property, plant and equipment
Plant,
equipment,
6 months to 30 June 2013 motor vehicles
and
Land Buildings computers Total
-------------------------------- -------- ---------- ---------------- --------
GBP'000 GBP'000 GBP'000 GBP'000
Cost:
1 January 2013 643 8,084 23,616 32,343
Additions - 17 589 606
Disposals - (376) (113) (489)
-------------------------------- -------- ---------- ---------------- --------
30 June 2013 643 7,725 24,092 32,460
-------------------------------- -------- ---------- ---------------- --------
Accumulated depreciation:
1 January 2013 - 3,607 18,766 22,373
Disposals - (2) (105) (107)
Charge for the year - 279 851 1,130
-------------------------------- -------- ---------- ---------------- --------
30 June 2013 - 3,884 19,512 23,396
-------------------------------- -------- ---------- ---------------- --------
Net book value at 30 June
2013 643 3,841 4,580 9,064
-------------------------------- -------- ---------- ---------------- --------
6 months to 30 June 2012
Carrying amount at 1 January
2012 643 4,540 6,170 11,353
Additions - 128 280 408
Disposals - - (3) (3)
Depreciation - (293) (889) (1,182)
-------------------------------- -------- ---------- ---------------- --------
Carrying amount at 30 June
2012 643 4,375 5,558 10,576
-------------------------------- -------- ---------- ---------------- --------
Year to 31 December 2012
Carrying amount at 1 January
2012 643 4,540 6,170 11,353
Additions - 518 506 1,024
Disposals - - (12) (12)
Depreciation - (581) (1,814) (2,395)
Carrying amount at 31 December
2012 643 4,477 4,850 9,970
-------------------------------- -------- ---------- ---------------- --------
9. Pension and other employee assets/obligations
The Company operates a funded pension scheme in the UK. The Fund
has both defined benefit and defined contribution sections. Since 1
January 2002 the Fund has been closed to new members. Active
members of the Fund ceased to accrue further benefits in the
defined benefit section on 31 July 2006. Under the current Schedule
of Contributions, contributions to the Fund for the year beginning
1 January 2013 will be GBP2.6m. This disclosure is in respect of
the defined benefit section of the Fund only.
The Group chose to early-adopt IAS 19 (Employee benefits,
revised) during 2012.
A full actuarial valuation of the scheme was carried out as at
31 December 2012 and has been updated to 30 June 2013 by a
qualified independent actuary. The major assumptions used by the
actuary were (in nominal terms) as follows:
30 Jun 2013 30 Jun 2012 31 Dec 2012
-------------------------------- ------------------- ------------------- -------------------
% % %
Discount rate 4.70 4.50 4.70
Pension increases - fixed 3.00 3.00 3.00
Pension increases - 5% LPI 3.20 2.60 2.75
Pension increases -2.5% LPI 2.50 2.50 2.50
RPI rate of inflation 3.20 2.60 2.75
CPI rate of inflation 2.50 1.90 2.25
-------------------------------- ------------------- ------------------- -------------------
Assumed life expectancies on retirement at age 65 are:
30 Jun 2013 30 Jun 2012 31 Dec 2012
Current Pensioners Current Pensioners Current Pensioners
-------------------- ---------- ------------------- ------------------- -------------------
Retiring today: Males 21.4 21.3 21.3
Females 24.0 23.9 23.9
------------------------------- ------------------- ------------------- -------------------
30 Jun 2013 30 Jun 2012 31 Dec 2012
Future Pensioners Future Pensioners Future Pensioners
---------------------- --------- ------------------ ------------------ ------------------
Retiring today: Males 21.1 21.0 21.0
Females 23.7 23.6 23.6
Retiring in 20 years
time: Males 23.0 22.9 22.9
Females 25.5 25.5 25.5
-------------------------------- ------------------ ------------------ ------------------
The assets in the scheme were:
Value at 30 Jun Value at 30 Jun Value at 31 Dec
2013 2012 2012
GBP'000 GBP'000 GBP'000
--------------------------- ------------------ ------------------ ------------------
UK Equities 23,061 19,534 21,237
Overseas Equities 23,420 19,533 21,397
Corporate Bonds 15,038 14,078 15,233
Cashflow Matching Bonds - - -
Property 4,637 4,674 4,636
Insured Annuities 737 - 738
Other 1,196 1,287 1,212
--------------------------- ------------------ ------------------ ------------------
68,089 59,106 64,453
--------------------------- ------------------ ------------------ ------------------
The actual return on
assets over the period
was 3,918 2,217 7,117
--------------------------- ------------------ ------------------ ------------------
Present value of defined
benefit obligation:
Deferred members 58,963 59,591 55,912
Pensioner members 30,524 27,275 30,501
Insured Pensioners 737 - 738
Funded plans 90,224 86,866 87,151
Unfunded plans - - -
------------------
Total 90,224 86,866 87,151
------------------
Present value of unfunded
obligations: 22,135 27,760 22,698
------------------
Unrecognised actuarial - - -
gains/(losses)
--------------------------- ------------------ ------------------ ------------------
Net liability in balance
sheet (22,135) (27,760) (22,698)
=========================== ================== ================== ==================
Reconciliation of opening and closing balances of the present
value of the defined benefit obligations
30 Jun 2013 30 Jun 2012 31 Dec 2012
GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ ------------ ------------
Benefit obligation at beginning
of period 87,151 83,251 83,251
Service cost 109 84 167
Interest expense 2,031 1,980 3,924
Actuarial loss arising from
changes in financial assumptions 2,549 3,083 2,015
Actuarial loss arising from
experience on the plan's liabilities (34) 35 214
Benefits paid (1,582) (1,567) (3,158)
Inclusion of insured annuities - - 738
Benefit obligation at end of
period 90,224 86,866 87,151
--------------------------------------- ------------ ------------ ------------
Reconciliation of opening and closing balances of the fair value
of plan assets
30 Jun 2013 30 Jun 2012 31 Dec 2012
GBP'000 GBP'000 GBP'000
--------------------------------- ------------ ------------ ------------
Fair value of plan assets at
beginning of period 64,453 57,156 57,156
Interest income 1,497 1,354 2,703
Return on plan assets excluding
interest income 2,421 863 4,414
Contributions by employer 1,300 1,300 2,600
Benefits paid (1,582) (1,567) (3,158)
Inclusion of insured annuities - - 738
Benefit asset at end of period 68,089 59,106 64,453
--------------------------------- ------------ ------------ ------------
The amounts recognised in the statement of comprehensive income
are:
30 Jun 2013 30 Jun 2012 31 Dec 2012
GBP'000 GBP'000 GBP'000
--------------------------------- ------------ ------------ ------------
Current service cost 109 84 167
Net interest on the net defined
benefit liability 534 626 1,221
Total expense 643 710 1,388
--------------------------------- ------------ ------------ ------------
Charged to:
Administration expenses 109 84 167
Finance costs 534 626 1,221
--------------------------------- ------------ ------------ ------------
643 710 1,388
--------------------------------- ------------ ------------ ------------
Remeasurements recognised in the statement of comprehensive
income are:
30 Jun 2013 30 Jun 2012 31 Dec 2012
GBP'000 GBP'000 GBP'000
---------------------------------------- ------------ ------------ ------------
Remeasurements recognised at
the beginning of the period (26,717) (27,878) (27,878)
Actuarial loss arising from changes
in financial assumptions (2,549) (3,083) (2,015)
Actuarial loss arising from experience
on the plan's liabilities 34 (35) (214)
Return on plan assets excluding
interest income 2,421 863 4,414
Remeasurements recognised at
the end of the period (26,811) (30,133) (25,693)
---------------------------------------- ------------ ------------ ------------
Deferred tax on actuarial loss (278) 80 (1,024)
---------------------------------------- ------------ ------------ ------------
Cumulative gains and (losses)
recognised in other comprehensive
income (27,089) (30,053) (26,717)
---------------------------------------- ------------ ------------ ------------
History of scheme assets, obligations and experience
adjustments
30 Jun 2013 30 Jun 2012 31 Dec 2012
GBP'000 GBP'000 GBP'000
---------------------------------- ------------ ------------ ------------
Present value of defined benefit
obligations 90,224 86,866 87,151
Fair value of scheme assets 68,089 59,106 64,453
Deficit in scheme (22,135) (27,760) (22,698)
Experience adjustments arising
on scheme liabilities 2,515 3,118 2,229
Experience item as a % of scheme
liabilities 3% 4% 3%
Experience adjustments arising
on scheme assets 2,421 863 4,414
Experience item as a % of scheme
assets 4% 1% 7%
---------------------------------- ------------ ------------ ------------
10. Equity
30 June 2013 30 June 2012 31 December 2012
--------------------- ---------------------
Shares GBP'000 Shares GBP'000 Shares GBP'000
-------------------------- ----------- -------- ----------- -------- ----------- --------
Authorised
Ordinary shares of 12.5p
each 64,000,000 8,000 64,000,000 8,000 64,000,000 8,000
-------------------------- ----------- -------- ----------- -------- ----------- --------
Issued and fully paid
Ordinary shares of 12.5p
each 43,197,220 5,400 43,197,220 5,400 43,197,220 5,400
-------------------------- ----------- -------- ----------- -------- ----------- --------
Share options
Number Number Exercise Exercise
of shares of shares price Period
2013 2012
---------------- ------------ ---------- ---------- --------- ---------
M A Wilmshurst Approved 25,751 25,751 GBP1.165 2009-16
Unapproved 1,096,055 1,096,055 GBP1.11 2009-16
S D G Thompson Approved 25,751 25,751 GBP1.165 2009-16
Unapproved 422,973 422,973 GBP1.11 2009-16
----------------------------- ---------- ---------- --------- ---------
1,570,530 1,570,530
----------------------------- ---------- ---------- --------- ---------
All the above options were issued on 4 July 2006 and no
additional share options have been issued since this date.
In total, GBPnil of employee compensation expense, in relation
to the incentive arrangement, has been included in the consolidated
statement of comprehensive income for 2013 (2012: GBPnil) (12
months to 31 December 2012: GBP13,000). The corresponding credit is
taken to shareholders' funds. No liabilities were recognised due to
share based transactions.
Each Director has been granted two tranches of options. The
first tranche is not subject to any vesting conditions and the
second tranche is subject to achievement of a Total Shareholder
Return performance condition. Under both tranches, vested options
can be exercised at any time between the third and tenth
anniversary of the date of the grant.
In 2011, the Company entered into incentive arrangements with M
A Wilmshurst and S D G Thompson providing for contingent cash
bonuses of up to GBP1,033,835 and GBP403,096 respectively, subject
to continued employment, in the event of a change of control of the
Company prior to 31 December 2014, linked to the price at which any
change of control occurred. These arrangements formed part of a
review of strategic options which has now been completed. No
consideration was given for the grant of these arrangements.
11. Distribution to shareholders and further information
The interim report will be available for the public on the
Group's website (www.nationwiderepairs.co.uk) and from the Group's
registered office, 17 Thorney Leys Park, Witney, Oxon, OX28 4GE.
Further information regarding the activities of the Group,
including a copy of the interim presentation, is also available on
the Group's website.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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